Chapter 5.3 · The application and the answer

Mortgage denials

Lenders denied 13.8% of the home-purchase applications they decided in 2024 in the most deprived tenth of census tracts and 7.8% in the least deprived tenth.

Author: Vishal Singh
Affiliation: NYU Stern
Published: 9 October 2026

In 2024 lenders denied 7.8% of the home-purchase applications they decided in the least deprived tenth of census tracts and 13.8% in the most deprived tenth. Averaged over the tracts of each tenth and weighted by decided applications, the median income that applicants reported was $279 thousand (95% CI $266 thousand to $292 thousand) in the least deprived tenth and $64 thousand (95% CI $63 thousand to $65 thousand) in the most deprived. A denial rate is the share of decided applications that ended in a denial, so these rates describe what became of applications filed in each kind of place.

Denials are level, then climb, across tenths of tracts

The chapter ranks tracts by the Area Deprivation Index, a national rank of neighborhoods built partly from income and housing costs. It cuts the ranked tracts into tenths that hold near-equal numbers of tracts. Each tenth's rate pools the denied and the decided applications of all its tracts, so it is not an average of tract rates. The rate is level across the three least deprived tenths. After the third tenth it rises at every step, and the last step, from the ninth tenth to the tenth, is the largest. The rate in the most deprived tenth is 6.0 (95% CI 5.2 to 6.8) points above the rate in the least deprived.

Because the rank is built partly from income and housing costs, the curve mixes where an applicant lives with how much money applicants there have. The least deprived tenth also holds the largest loans, a median loan amount of $827 thousand (95% CI $774 thousand to $879 thousand) against $162 thousand (95% CI $158 thousand to $167 thousand) in the most deprived tenth, averaged the same way. The tract file does not say whether loan size, income or credit history sits behind a denial, so the curve describes where applications are denied and not why.

Figure 1

The denial rate was 7.8% in the least deprived tenth of tracts and 13.8% in the most deprived, and it is level across the three least deprived tenths

Denied share of decided home-purchase applications, 2024, against the tract's Area Deprivation Index national rank: sampled tracts with at least 30 decided applications as dots and pooled rates for tenths of tracts as the line

Loading data

The line is level across the first three tenths and rises at every step after that, while single tracts scatter around it. The line plots the pooled denial rate of each tenth of tracts, with 95% intervals from a bootstrap over counties. The dots are a random sample of tracts that each decided at least 30 applications. Values in Table 2.

Note: Dots are drawn from the tracts that decided at least 30 applications, with a fixed seed (stated in the methods note). The pooled rates use every tract with a published cell and a rank, 75,978 tracts, in tenths that hold near-equal numbers of tracts. A tract with no rank is left out (94 tracts).Note: Across all the ranked tracts the pooled denial rate is 9.0%.Note: The Area Deprivation Index is a national percentile, 1 least and 100 most deprived, and it understates deprivation in high-cost cities. Rates are not adjusted for the applicant's credit, debts, loan size or loan type, which the tract file does not hold.Source: HMDA Loan/Application Register, 2024, tract totals of decided applications; Area Deprivation Index, 2023; full counts, pooled rates

How we know

The data are the 2024 tract totals from the Home Mortgage Disclosure Act, which requires lenders above size thresholds to report every application and what became of it. The chapter keeps first-lien home-purchase applications on site-built homes with up to four units that applicants intend as a principal residence, in 76,072 tracts across every state and DC. A decided application is one the lender originated or denied, so withdrawn and incomplete applications are outside the rate, and so are people who never applied. When the file was staged, any tract cell with fewer than 10 applications was withheld and counts as missing, never as zero. The file holds no credit score, debt-to-income ratio, loan-to-value ratio, loan type or lender for any applicant, so the gaps in this essay are not estimates of discrimination. The report gives every estimate with its interval and sample size.

Black applicants are denied more often in the same tracts

HMDA records an applicant's ethnicity and race as the applicant reports them, with fallback rules when the applicant does not answer. Comparing groups across all tracts mixes who lives where with how applications fare. A narrower comparison keeps only the tracts where both non-Hispanic Black and non-Hispanic white applicants have a published cell, and sets each group's pooled rate in those tracts side by side. In the 5,657 tracts that hold both cells, Black applicants were denied 16.2% (95% CI 15.7% to 16.8%) of the time and white applicants 6.2% (95% CI 6.0% to 6.5%). The chapter makes the same comparison for Hispanic and for non-Hispanic Asian applicants in the tracts they share with white applicants. The Black gap is larger than the Hispanic gap, which is larger than the Asian gap.

Figure 2

In the tracts that hold both groups, Black applicants were denied 16.2% of the time and white applicants 6.2%

Denied share of decided home-purchase applications, 2024, for each applicant group and for non-Hispanic white applicants in the same tracts, tracts where both cells are published

Non-Hispanic white applicants in the same tracts
Applicants of the group in the row

Show data

Data for In the tracts that hold both groups, Black applicants were denied 16.2% of the time and white applicants 6.2%
group	hi	lo	rate	tracts	white	white_hi	white_lo
Non-Hispanic Black applicants	16.77	15.67	16.20	5657	6.23	6.50	5.96
Hispanic (any race) applicants	13.53	12.17	12.83	10189	6.47	6.77	6.19
Non-Hispanic Asian applicants	9.37	8.50	8.91	5490	5.70	5.99	5.42

The group's dot lies to the right of the white dot in every row, farthest apart for Black applicants, then Hispanic applicants, then Asian applicants. Each row pools the applications of one group and of white applicants over the tracts that hold both cells, so the white dot differs across rows. The whiskers are 95% intervals from a bootstrap over counties. Values in Table 4.

Note: The same tract holds the neighborhood fixed, not the applicant. The tract file has no credit score, debt-to-income ratio, loan-to-value ratio, loan type or lender for each applicant, so a gap here is not evidence of discrimination by itself and the data cannot say how much of it these items account for.Note: The tracts that hold both cells are 7.4% of all tracts for Black applicants. The tracts differ by row (5,657 for Black applicants, 10,189 for Hispanic applicants and 5,490 for Asian applicants), because a cell exists only where a group has 10 or more applications. Over each group's own tracts the Black gap is 10.5 points.Source: HMDA Loan/Application Register, 2024, tract totals of decided applications; Area Deprivation Index, 2023; full counts, pooled rates

The same-tract gap between Black and white applicants shows no trend with the deprivation of the tract. Its slope across tenths of the index is 0.00 (95% CI −0.22 to 0.21) points per tenth, and the gap's interval is above zero in every tenth. Single tenths differ from one another, so the claim is about the trend and not about every tenth. Grouping the same kind of tracts into fifths by the median income their applicants reported shows no trend either. A fifth groups tracts by the typical income of their applicants and not applicants by their own income.

Figure 3

The same-tract gap between Black and white applicants stays between 8.6 and 10.4 percentage points across tenths of tract deprivation

Black minus white denied share of decided home-purchase applications, 2024, in tracts where both cells are published, by tenth of tracts on the deprivation index and by fifth of tracts on median applicant income

The Black minus white gap is positive in every tenth of tract deprivation

Percentage points of denial rate, Black minus white applicants in the same tracts, by tenth of tracts on the Area Deprivation Index (1 = least deprived)

Gap in denial rate, Black minus white (percentage points)

The gap shows no trend from the least to the most deprived tenth, with the widest interval in the least deprived tenth, where the fewest tracts hold both cells.

Show data

Data for The same-tract gap between Black and white applicants stays between 8.6 and 10.4 percentage points across tenths of tract deprivation, By tract deprivation
conf_high	conf_low	gap	tenth	tracts
13.59	7.64	10.31	1	77
11.12	7.84	9.57	2	335
9.56	7.69	8.61	3	514
10.79	8.83	9.81	4	725
11.14	9.46	10.33	5	809
11.61	9.34	10.45	6	849
10.36	8.55	9.44	7	776
10.85	8.70	9.72	8	628
11.39	9.06	10.19	9	547
10.72	7.92	9.32	10	395

The gap is positive with an interval that excludes zero in every tenth and every fifth, and it shows no trend in either tab. The first tab groups the tracts that hold both cells by tenth of the deprivation index and the second by fifth of median applicant income. Each point pools the two groups' applications over its tracts, with 95% intervals from a bootstrap over counties. Values in Table 5.

Note: The tenths hold near-equal numbers of the tracts with a rank (tracts tied on the rank stay together); the fifths hold near-equal numbers of the 5,657 tracts that hold both cells and a median applicant income, so a fifth groups tracts by the typical income of their applicants and not applicants by their own income. The median income is the median of the incomes reported on the tract's applications.Note: The ratio of the Black to the white rate is 2.8 in the fifth tenth and 2.0 in the most deprived tenth.Source: HMDA Loan/Application Register, 2024, tract totals of decided applications; Area Deprivation Index, 2023; full counts, pooled rates

The tracts that hold both cells are 7.4% of all tracts and a selected set, because a group's cell exists only where the group itself passes the floor of applications. A tract also holds the neighborhood fixed and leaves the applicant free to differ. Applicants in one tract can differ in credit history, debt relative to income, the down payment, the loan type and the lender they chose, and none of these is in the tract file. A study of Boston lenders, published in 1996, added fields for credit history, debt burdens and loan-to-value ratios to the application records. With those fields, the difference in denial rates between minority and white applicants narrowed and did not disappear.[1] The tract file cannot repeat that exercise. Its gaps can be larger or smaller than the gaps among applicants with the same finances, and the data do not say which.

What the curve across tracts does and does not mean

The two results describe different comparisons. Across tracts, the denial rate rises with deprivation after the third tenth, and applicants in the most deprived tenth report lower incomes than those in the least deprived. Within tracts, the gap between Black and white applicants shows no trend with the deprivation of the tract or with the typical applicant income in it. Both are patterns among applications grouped by place, and a rate among tracts is not the chance that any one applicant is denied.

The chapter also matches the grades that the Home Owners' Loan Corporation gave neighborhoods between 1935 and 1940, from A, labeled best, to D, labeled hazardous, to 2020 tracts.[2] For home-purchase applications decided in 2024, the denial rate in grade D tracts was 3.4 (95% CI 2.1 to 4.7) points above the rate in grade A tracts. Comparing tracts of the same city and the same tenth of the deprivation index removes that gap, which becomes 0.0 (95% CI −1.1 to 1.1) points. In 2024 the differences across grades line up with the deprivation of the tracts today. The comparison does not say whether the maps had a part in how those tracts came to be deprived. The graded tracts lie in the cities that HOLC surveyed and are not a sample of the country. Chapter 5.2, Home value, income and redlining sets the same grades beside life expectancy and home values.

Figure 4

Denial rates rise from 7.9% in grade A tracts to 11.3% in grade D tracts, and no grade differs detectably from grade A among tracts of the same city and the same tenth of the deprivation index

Denied share of decided home-purchase applications, 2024, in tracts graded on the 1930s HOLC maps: by grade, as a difference from grade A under three adjustments, and by applicant group

Within a city and a tenth of the deprivation index, no grade differs detectably from grade A

Denial rate of tracts of each grade minus that of grade A tracts, percentage points, from weighted regressions with errors clustered by county

No adjustment
Same city
Same city and tenth of the deprivation index

With no adjustment or within a city, every grade is above grade A; comparing tracts of the same city and the same tenth of the deprivation index puts all three intervals around zero.

Show data

Data for Denial rates rise from 7.9% in grade A tracts to 11.3% in grade D tracts, and no grade differs detectably from grade A among tracts of the same city and the same tenth of the deprivation index, Within city and deprivation
comparison	conf_high	conf_low	estimate	specification	tracts
Grade B against grade A	2.41	0.520	1.47	No adjustment	8748
Grade C against grade A	4.10	1.91	3.01	No adjustment	8748
Grade D against grade A	4.74	2.09	3.42	No adjustment	8748
Grade B against grade A	2.59	1.01	1.80	Same city	8748
Grade C against grade A	3.97	1.99	2.98	Same city	8748
Grade D against grade A	4.83	2.15	3.49	Same city	8748
Grade B against grade A	0.480	−0.910	−0.210	Same city and tenth of the deprivation index	8748
Grade C against grade A	0.620	−1.35	−0.360	Same city and tenth of the deprivation index	8748
Grade D against grade A	1.08	−1.06	0.010	Same city and tenth of the deprivation index	8748

Comparing tracts of the same city and the same tenth of the deprivation index puts all three intervals around zero, while with no adjustment or within a city every grade is above grade A. The dots are differences from grade A, in points of the denial rate, for grades B, C and D, from regressions of tract denial rates weighted by decided applications, with errors clustered by county. The other tabs show the rates by grade and by applicant group. Values in Table 6.

Note: A tract takes a grade when graded polygons cover at least 50% of its area, and the grade that covers the most of it. The tracts are the 8,748 graded tracts with a published cell and a deprivation rank, in 221 city and state pairs. With a stricter rule, graded polygons covering at least 90% of a tract, the gap between grades D and A is 2.8 points. The comparison is descriptive: the grades followed the housing, incomes and populations of the 1930s, and the HOLC cities are not a national sample.Note: The adjusted differences come from weighted regressions of the tract denial rate on grade, weighted by decided applications, with errors clustered by county, on the 8,748 graded tracts. The third adjustment gives each of 1,008 city and tenth cells its own baseline, so a grade is compared with another grade only inside a cell that holds tracts of both.Source: HMDA Loan/Application Register, 2024, tract totals of decided applications; Mapping Inequality HOLC maps (1935-1940) overlaid on 2020 tracts; Area Deprivation Index, 2023; full counts, pooled rates

What this cannot tell you

Applications are not the population, and people who expect a denial, who are steered to another loan or who cannot get an answer to an inquiry do not appear in a denial rate.In an email experiment, Hanson, Hawley, Martin and Liu found that licensed mortgage loan originators answered inquiries with names chosen to signal a Black sender less often, and gave those senders less loan information.[3] The experiment measures replies and ends before any application, so it observes no denial. Its estimates are for the originators and inquiries in the sample. The file covers one year and the lenders above the HMDA reporting thresholds, and the deprivation index understates deprivation in high-cost cities. The intervals resample counties, but applications at one lender share its rules across county lines, so the intervals may be narrower than the uncertainty.

Go deeper

The report: every estimate with its interval and sample size.
Tables: every figure of the report as a table.

Data sources

HMDA mortgage lendingHome Mortgage Disclosure Act Loan/Application Register, 2024, first-lien site-built one-to-four-unit principal-residence applications aggregated to 2020 tracts by loan purpose and applicant group; cells under 10 applications withheldYears: 2024 · Weights: none (counts of decided applications, pooled over tracts) · License: Public domain (U.S. federal)
Area Deprivation IndexArea Deprivation Index 2023, national rank by tractYears: 2023 release (version 4.0.1; built on ACS 2019-2023) · Weights: none (tenths hold near-equal numbers of tracts) · License: Free for non-commercial use; cite the Neighborhood Atlas and Kind and Buckingham
Mapping Inequality (HOLC maps)Mapping Inequality HOLC residential security maps, 1935 to 1940, graded polygons overlaid on 2020 tractsYears: 1930s-1940s maps (2023 digitization) · Weights: decided applications · License: CC BY-NC-SA 4.0 (cite Nelson and coauthors)
Published estimates from cited studiesOne comparison quoted from the abstract of Hanson, Hawley, Martin and Liu (2016)Years: as reported in each study · Weights: as reported in the paper · License: Quoted from published research for commentary

All data sources

References

Munnell, Alicia H.; Tootell, Geoffrey M. B.; Browne, Lynn E.; McEneaney, James (1996). Mortgage Lending in Boston: Interpreting HMDA Data. American Economic Review 86(1): 25-53.
Nelson, Robert K.; Winling, LaDale; Marciano, Richard; Connolly, Nathan; et al. (2023). Mapping Inequality: Redlining in New Deal America. American Panorama, ed. Robert K. Nelson and Edward L. Ayers, Digital Scholarship Lab, University of Richmond. dsl.richmond.edu/panorama/redlining/
Hanson, Andrew; Hawley, Zackary; Martin, Hal; Liu, Bo (2016). Discrimination in Mortgage Lending: Evidence from a Correspondence Experiment. Journal of Urban Economics 92: 48-65. doi:10.1016/j.jue.2015.12.004

How to cite

@misc{singh2026mortgagedenials,
  author = {Singh, Vishal},
  title = {Mortgage denials},
  year = {2026},
  url = {https://vishalsingh.org/zipcode/mortgage-denials},
  note = {In ZIP Code Destiny. Published 9 October 2026.}
}